Income Inequality Is Big, Wealth Inequality is 100 Times Bigger

Typically, the discussion around U.S. economic inequality focuses on the growing disparity between incomes. However, another measure of inequality, one which may be a more useful measure, has gone largely overlooked, wealth inequality.

Income inequality: the top 1% earn as much as the bottom 40%

The top 1% of U.S. households earn as much annual income as the lowest-earning 40%. Pretty striking!

But is income really the best way of measuring economic inequality?

Thinking about it intuitively, income represents something very specific, the amount of money a household had coming in during a given year. But if what we’re trying to measure is a household’s financial well being, it would seem more useful to look at the amount of money that household actually has, household wealth.

Here is a chart showing the extent of U.S. wealth inequality. For comparison, it is shown side-by-side with the income inequality chart from above.

America’s 4 wealthiest households own as much as the bottom 40%

The bar on the left includes about 128 million people. Their combined net worth is matched by the wealth of only 4 U.S. billionaires, Bill Gates, Warren Buffett, and the Koch Brothers.

Edit: This post is not an indictment against the wealthy. In fact, there are few people I have more respect for than Bill Gates. The world would be a very different place if it weren’t for entrepreneurs like him. And on top of it, he is now using his money to help others.

These are just the facts, and everyone is free to decide whether they see this kind of inequality as OK or not.

I'm an NYC-based entrepreneur (my newest project: Blueshift) and adjunct instructor at UPenn. I'm fascinated by data visualization and the ways that data is transforming our understanding of the world. I spend a lot of time with my face buried in Excel, and when I find something interesting I write about it here and also as a Guardian Cities and Huffington Post contributor.More about my background

That is the stupidest reason for that stupid old socialist to be president. My well-being isn’t affected at all by those ‘top 4’ having several billions of dollars. More power to them. Having that much money is not as easy at it seems.
Then again, talking logic to a sanders supporter is like discussing quantum physics with a wall.

JoeD

Yeah, if:

A) wealth were some static figure that is doled out to the people. It’s not.

B) you could show that wealth inequality was a problem. I’ve yet to see this. Simply saying wealth inequality is a problem means little. If the top 1% are 100x wealthier than the other 99% it means little if the 99% are wealthier than they used to be. The top 1% are not wealthier because they stole wealth from the other 99%. That’s a child’s view of wealth.

However, there is something to be said for businesses getting special favors from government, which is what Bernie Sanders supporters tend to want, even if they don’t relize it. They want more government control – more regulations. The sad fact is that the average person thinks that government regulations protect consumers. Government regulations have effect and one effect only: protecting existing business from competition.

PA

Is there a CDF for wealth and another for income? I always see this 40% vs. 1% comparison thrown out in the popular press because it makes nice, dramatic bar graphs, but it doesn’t tell me a whole lot about the underlying distribution.

http://metrocosm.com Max Galka

Though not displayed cumulatively, the distributions are shown in the Harvard Business School and Congressional Budget Office reports linked above.

freeinaz

I can’t imagine having so much money you could never spend it all in your lifetime. Good for them and the majority of these billionaires are extremely charitable.

http://metrocosm.com Max Galka

Yes, I agree. The majority of today’s billionaires are also self-made. More power to them.

Cruel Intentions

“Self Made” my dick. It is who you know, what you know and what you inherit and only then your talents and abilities. You think you can climb that high without slitting a few throats? Without walking on bones. Without hurting people?

Let me mention this, all them cocksuckers at the top are related. This American “democracy,” looks more like a monarchy; in reality it is a polygarchy. Look at the Johnson and Johnson family, disgust pigs. I wish it was 1917 here, to violently de-throne this privileged, richy-richy parasites. To prove my point, that “self made” is a bogus concept, a carrot for the ass of humanity. I know a man who was homeless a “speed” enthusiast his whole life. Not that he did not have opportunities he fucked off or a job that he would go to when he wanted and could not get fired from. He is not a bad dude, generous, even kind.

Overnight, he became rich and got property. While others busted their ass there whole life, their hands scarred from the manual labor they did, their whole lives only to be dying painfully from cancer and not being able to pay the bills or have a full fridge. Even in my case, I knew someone. They gave me a house, money and opportunity.

You want to see generosity, it is most often in the poorest layers of society. People who have nothing share the last of what they have with a stranger. That’s fucking generosity. When you actually feel it. When I did not have a dollar to spare, I bought everyone in my group and their kids dinner. We came home tired and hungry from the job we where doing. I wanted to reward my people. Point is, I left my food on the table in the office. Only to find this girl devouring it. I NEVER had seen someone eat like that. Like an animal that was starved for weeks and scared someone will snatch her food way. Like something you would see on the discovery channel that is happening in war torn Africa. I would have shared or just given it to her, but she didn’t even ask. Do you think this child can be “self made?”

You think that this 17 year old street chick has a chance?
Another time I spotted her trying to break into the back door of my house at 4 am in the morning with all her bags and things, looking exhausted and panicky. So when we went in. we went straight to sleep, I put my hand over her waist and she got uncomfortable and asked me to please not to touch her.

This was unusual. Apparently, someone just tried to rape her so she ran away and was still dealing with what happened. She wanted to spend the night, to sleep somewhere safe. What about this prostitute, I came across? You think she has a chance to be “self made.”

People are exploited in this system, without mercy, you are a tool and this blue bloods inherit everything. You fine folks believe being a billionaire is right and dandy. It is beyond unnatural, five thousand years ago we had no currency. Now we got billionaires, corporation and exploitation on massive scale. You pet them on the back, while others starve. There is only one billionaire I know of that lost her billionaire status by giving it away. JUST FUCKING ONE!!! Guess who she is…

It is a sick culture, based on what people see is as acceptable and normal. You see with that much power man become gods. If that is not obscene, perverse and immoral; I do not know what is.

Cruel Intentions

LoL, charitable or not. This “disparity” is the definition of EVIL. One sharpens the pitchforks waiting for others to wake up.

John Parsons

Nicely presented, Max. I’d like to see the shift in these stats over time, as you’ve done with US government revenue and spending.

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